So you’ve made it your mission to attract money for your real estate investments through joint ventures, and you have also likely thought about how you are going to do it efficiently and effectively. But what is the best way to attract partners with the investment capital needed to meet your goals and theirs? By using the three pillars of real estate Joint Ventures to showcase your expertise that will ensure their money grows while in your capable hands.
Give your partners the peace of mind they deserve by focusing carefully on building a system that you can repeat over and over in all of the investment opportunities you engage in. Build a relationship first and a partnership second – both parties stand to gain from this critical piece of the puzzle. Following through on your plan and your intentions is the best way to cultivate the aforementioned relationships – you show respect for your partner by respecting your own promises and you have the opportunity to earn a partner for many years and many deals.
An impenetrable real estate business starts with a sturdy foundation, solid walls and a roof to keep out the inclement market ‘weather’. If you can create this synergy, there is no limit to what you can achieve through real estate investing. Let’s take a closer look at the three pillars of Joint Ventures.
Systems
Systems take the guesswork out of the day-to-day operation of running a real estate investment business. Score cards and checklists help you find and assess potential properties. They also speed up the process whereby you discard properties that do not fit your system and help you identify joint venture money worth pursuing (or not worth pursuing).
Bookkeeping systems ensure you know where every last receipt is and where every piece of paperwork is filed. Why rely on the memory of a hard-working investor who is juggling multiple properties when you can put filing systems in place that will never let you down?
The same holds true for every other aspect of your business. Systems help you find and keep quality tenants. They help you track which suite’s bathroom needs a new washer in the faucet and which one needs new fluorescent bulbs. They let you monitor an investment’s financial performance and guide decisions about what you need to do to keep your business on track. All of this information – and knowing where to find it and what it means – will be critical to making sure your JV partners understand how real estate investing works. It will also build JV partner confidence in your management decisions because it shows that you’re taking the necessary steps to keep a shared investment on track.
Relationships
To the sophisticated investor, positive relationships are the people side of systems. You fine-tune systems that promote business success and you nurture the relationships that grow your business. You also wean yourself away from the relationships that cost your business in terms of time, frustration and money.
When you are investing with other people’s money, these relationships are even more important. Believe it or not, even the newest real estate investor comes into the business already knowing most of the people he or she will need to raise money for his real estate deals. The key to a successful business is harnessing these relationships and nurturing them in order to secure the capital needed for that next real estate deal.
Follow-Through
Follow-through implies doing what it takes to make sure every one of your real estate deals goes through and is successfully managed. You can’t reach your goals without taking action, and if you need other people’s money to grow your portfolio then you also need to do what it takes to find that money.
Think about it: You can’t buy a property without securing a mortgage and signing the legal documents. You can’t find quality tenants without securing a quality property and you can’t attract other people to your deals without following up on conversations with those who are interested in expanding their personal long-term wealth. Without follow-through, that money will find a home somewhere else!
This does not mean relentlessly pursuing every property that meets what your system demands or every JV dollar that might make your next deal happen – due diligence still matters. You must close the deals you can and move on from the deals you can’t. You must open discussions about JV deals, but only commit to those that fit your systems and your long-term goals.
Once you are clear about the systems of your business, the relationships that surround you and the follow-through needed to close the loop, you are ready to become a money magnet. Build an impenetrable real estate business ‘fortress’ out of the Three Pillars of Joint Ventures – your financial future rests in your hands alone.
If you’re interested in learning how to raise money for your personal real estate portfolio, join the REIN team on June 16th for the inaugural Raising Capital Training Event being held at the International Centre in Toronto. You can contact me, Shannon Murree for your VIP link
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